Break out the games!
Every year, when my kids start their Christmas break, we tend to play a lot more games as a family to pass the cold winter days.
We have our favorites.
The world’s richest often make splashy headlines for their splurges.
This time around, it’s about what they’re selling.
That’s because corporate insiders are offloading shares at a furious clip. Just in the S&P 500, insiders have sold $63.5 billion in shares through November, according to The Wall Street Journal.
That’s a 50% increase from the same time last year.
Elon Musk and Jeff Bezos alone have sold about $10 billion each in their company’s respective stock.
Other founders and executives from giant corporations such as Alphabet and Meta are joining them.
Now some of the sales come down to tax hikes due next year. But you must assume historically elevated valuations and uncertainty on the horizon play a role as well.
Does that mean you should join their ranks and head for the exits?
Not so fast…
Not Everyone Is Selling
Insider selling in the technology sector shares accounts for 65% of the total … those very stocks propping up the overall stock market.
But not everyone is selling.
Just as insiders know when their shares appear dear, they also know a bargain when they see one.
And they see bargains in small-cap and value segments of the market.
According to Barron’s analysis at the start of the quarter, insider purchases favored small caps over larger stocks. They also favored cheap stocks based on low price-to-earnings (P/E) and price-to-book (P/B) ratios.
That’s why you should check out the most recent issue of The Bauman Letter. We uncovered a great opportunity with a large insider presence that trades at a forward P/E of under seven, and a P/B ratio that’s an 85% discount to its peers. Not to mention, a recent $1.2 trillion tailwind was thrown into the mix. Just click here to learn about our most recent pick!
Research Analyst, The Bauman Letter